Running head: THE UCC: LEGAL RELATIONSHIPS PAPER 1

The UCC: Legal Relationships Paper

Grand Canyon University: ACC 623
2014


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The UCC: Legal Relationships Paper
History of the UCC
The Uniform Commercial Code (UCC) originally established in 1954 as a set of
comprehensive laws governing commercial transactions between states and territories within the
United States. There has been several revision to this set of laws since the 50s in the US as
technology has changed the way business is conducted. These transactions may include but not
limited to; sale of goods, leases, banking and credit transactions, and contracts. Amongst these
laws include regulations regarding inspections, payments, revocations and rejections of goods
across state lines. The UCC is a uniform act that was written by the National Conference of
Commissioners on Uniform State Laws and the American Law Institute, which are private
organizations that encourage adoption of consistent business laws across the United States (SBA,
2010).
UCC is however not federal law, and its limitations include that the law is not exactly the
same from each state to state so businesses must comprehend how the law is as sanctioned in
each individual state and preform business accordingly. According to the Small Business
Administration (SBA), all 50 states and U.S territories have adopted the UCC either verbatim or
in a form that has been modified to meet the specific state's needs (2010). There is information
website, www.business.gov/business-law/ucc/, which is an official site of the SBA. This website
provides links to the UCC that has been adopted in each of the U.S. states and territories.
Before 1997 and the institution of the UCC commercial transitions of course occurred
across state lines but were cumbersome and beyond expensive as each state had control over
tariffs and cost to cross their state line on goods, services rendered, financials service
transactions, ect. The UCC creates structure between parties in commercial transactions across
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state lines, making it easier to do business within the states and territories of the United States,
passing those savings and accessibility to the consumer (Mallor, 2013). UCC stimulates
interstate commerce with the US which allows each individual businesses to partner with the best
of the best partners, such as distributors and manufacturers, in the country rather than limiting
them to their home state.
Current use of the UCC
In the United States commercial market place now over 17 years later after the formation
of the UCC any formation of a contract including the sale of goods the Uniformed Commercial
code applies across all 50 states as mentioned previously. Typically there is a seller and a buyer,
where the seller delivers a good and the buyer in exchange for the good gives payment to the
seller. The primary responsibility of the seller is to provide the promised good within the contract
time constraints and the buyers of the goods to pay for them. When the goods are delivered the
buyer must inspect, accept and pay for the goods. Under the UCC, by default, the sellers
delivery of the goods and the buyers payment for the goods are expected to be concurrent.
Unless otherwise agreed, delivery of the goods is a condition of the buyers duty to pay, and
payment for the goods by the buyer is a condition of the sellers duty to complete delivery
(SBA, 2010). In regards to payment from the buyer, the UCC allows for payment by any
means or in any manner current in the ordinary course of business, unless the seller demands
payment in cash. Any means could mean a variety of payment options other than cash, from
debit or credit cards, business or personal checks, wired transfers, paypal, ect.
An example of the UCC in effect in todays US marketplace would be a seller, Jones Inc.
of Texas who, under a sales contract, has until May 31st to deliver printers to buyer, and CEO of
Grand Canyon University of Arizona and delivers defective printers on May 14th, which the
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CEO rejects. Jones Inc. would still have until May 31st to deliver conforming, non-defective
printers to the University. If Jones Inc. does not come through by May 31
st
, on June 1
st
the buyer
can breach the contract and take business elsewhere.
The Uniformed Commercial Code consist of separate parts known as articles, of which
the UCC contains 11 articles as follows (2006):
Sales (Amended Article 2);
Leases (Amended Article 2A);
Negotiable Instruments, previously known as Commercial Paper (Revised Article 3);
Bank Deposits and Collections (Amended Article 4);
Funds Transfers (Article 4A);
Letters of Credit (Revised Article 5);
Bulk Sales, previously known as Bulk Transfers (Revised Article 6);
Documents of Title (Revised Article 7);
Investment Securities (Revised Article 8); and
Secured Transactions (Revised Article 9).
These commercial articles under the UCC are taken however state by state and case by case and
is the responsibility of the buyers and the sellers to take the appropriate actions to protect
themselves in a contract of a sale of goods. UCC initial establishment and intentions of the
National Conference of Commissioners on Uniform State Laws and the American Law Institute
to encourage and cover buyers and sellers in the sale of goods to protect them and promote good
business, fair dealing and higher standards in the marketplace within the states and territories in
the United States. These buyers and sellers could include parties from manufacturing, farming,
livestock, currency exchange, minerals, or any organization that moves any tangible thing. These
types of transactions are not covered by the UCC; Real Estate, Divorce, Family Support,
Alimony, and Prenuptial Agreements. Because of its success and proven track record, the model
of the Uniformed Commercial Code has been mirrored in other divisions of state regulation and
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continues to impact and regulate todays ever changing commercial market place here in the
United States.





















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References
Mallor, J., Barnes, A., Bowers, T, & Langvardt, A. (2013). Business Law The Ethical, Global,
and E-Commerce Environment. (15
th
ed.). New York, NY. McGraw-Hill, Irwin
Revised Uniform Limited Liability Act. (2006). Retrieved from
http://www.uniformlaws.org/shared/docs/limited%20liability%20company/ullca_final_0
6rev.pdf
U.S. Small Business Administration (SBA) (2010). Uniform Commercial Code (UCC).
Retrieved from http://www.business.gov/business-law/ucc/